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Toronto and London Stock Exchanges to merge?
- Thread starter Jonny5
- Start date
Bogtrotter
Senior Member
"The Singapore and Australian exchanges said on Tuesday that they had revamped their merger proposal in an attempt to win regulatory support for the $8.4 billion deal. Notably, the combined exchange would have an equal number of Australian and Singaporean citizens on its 13-member board, with five for each nation and three international directors. With the new terms, SGX hopes to overcome the qualms of Australia’s political and business worlds, which fear that control would slip away from Sydney."
I would expect that for this to be accepted by Ottawa and Quebec a similar arrangement would have to be made. Interesting,but then what.. NY buys out the LSE/TMX with majority US and Kuwaiti shareholders? Interesting to see where this is all headed- if anywhere.
I would expect that for this to be accepted by Ottawa and Quebec a similar arrangement would have to be made. Interesting,but then what.. NY buys out the LSE/TMX with majority US and Kuwaiti shareholders? Interesting to see where this is all headed- if anywhere.
js97
Senior Member
I believe UAE owns about 30% of the LSE.
Consolidation is great, but it really goes againstone of the most important investment pillars for long-term success: diversification.
Canadian banks were not allowed to merge a decade ago (did they lose their competative edge?) Look at how well the mergers faired for our friends in the south.
That being said, the LSE has even tighter regulations than the TMX, so we will see.
Maybe canada can be a colony of the Brits once again?!
Bogtrotter
Senior Member
Some Brits still think we are
But everyone knows our asses really belong to the Americans. I wonder why the TMX doesn't just join the US-German consortium- wouldn't that make more sense.
Automation Gallery
Superstar
TMX marriage should get our blessing
The merger or takeover or extreme makeover of the Toronto Stock Exchange by the London exchange must go ahead.
As the German Exchange makes a bid to invade and occupy the New York Stock Exchange and Singapore and Australia make out behind the bleachers, Toronto can’t afford to be left without a partner, especially so close to Valentine’s Day.
Besides, if it wasn’t the amicable Brits, it could easily be the prickly Americans. I suspect the ultimate goal of these arrangements is to make it easier for companies listed on one exchange to trade on the other, which would be great for investors, companies and the newly merged exchange, but not all partners are equal.
The process to get listed on an American exchange is already so unappealing that TMX officials use Canada’s relatively straightforward rules as bait to attract U.S. startups to the Toronto Exchange.
It wouldn’t be much fun to hook legs with the Americans knowing some junior congressman would want to change the rules every time a constituent lost $1,000 on a junior mining stock.
Anyway, this merger idea seems to be quite alarming to some people, but before we get to the part where we dismiss their concerns, I offer up an inconvenient fact. Let’s remember the TMX is a shareholder-owned company and not a government agency, though the rhetoric might lead you to believe otherwise.
Except in very rare situations, shouldn’t we let those who risked their capital and built up the company decide to whom and when they wish to sell?
Besides, if governments constantly intervene in a market to tell the players who can invest in which companies, then soon those companies are going to be worth a lot less, and investment will dry up. Without that investment we’ll all be a lot poorer.
My friends in the NDP have an odd take on all of this. Attacking corporate Canada is a kind of hobby for them, but now they want public hearings to protect the Canadian companies that they normally kick around.
Yeesh, it’s not enough that we ask foreign companies to risk their capital in Canada, abide by myriad laws and regulations and pay taxes — now the NDP also wants to put them on trial.
Of course, the first thing the NDP would want to know is how much the CEO would get paid, which obviously would have nothing to do with the merger.
Oh, and how did you travel here? You didn’t ride a bike over from London? Shame on you.
Sure they bring untold billions of dollars to Canada and produce enormous wealth which is then redistributed, but the NDP won’t be happy until corporate executives beg forgiveness, renounce their worldly goods and run crying from the room.
In the depressing world of the NDP, if you’re a success in business it’s because you exploited the workers, the environment or that mythical figure, the little guy. They see the movie Wall Street as a documentary.
The government should approve this deal without delay, lest the horrid idea of public hearings gets traction and makes Canada an investment pariah.
Toronto Sun
The merger or takeover or extreme makeover of the Toronto Stock Exchange by the London exchange must go ahead.
As the German Exchange makes a bid to invade and occupy the New York Stock Exchange and Singapore and Australia make out behind the bleachers, Toronto can’t afford to be left without a partner, especially so close to Valentine’s Day.
Besides, if it wasn’t the amicable Brits, it could easily be the prickly Americans. I suspect the ultimate goal of these arrangements is to make it easier for companies listed on one exchange to trade on the other, which would be great for investors, companies and the newly merged exchange, but not all partners are equal.
The process to get listed on an American exchange is already so unappealing that TMX officials use Canada’s relatively straightforward rules as bait to attract U.S. startups to the Toronto Exchange.
It wouldn’t be much fun to hook legs with the Americans knowing some junior congressman would want to change the rules every time a constituent lost $1,000 on a junior mining stock.
Anyway, this merger idea seems to be quite alarming to some people, but before we get to the part where we dismiss their concerns, I offer up an inconvenient fact. Let’s remember the TMX is a shareholder-owned company and not a government agency, though the rhetoric might lead you to believe otherwise.
Except in very rare situations, shouldn’t we let those who risked their capital and built up the company decide to whom and when they wish to sell?
Besides, if governments constantly intervene in a market to tell the players who can invest in which companies, then soon those companies are going to be worth a lot less, and investment will dry up. Without that investment we’ll all be a lot poorer.
My friends in the NDP have an odd take on all of this. Attacking corporate Canada is a kind of hobby for them, but now they want public hearings to protect the Canadian companies that they normally kick around.
Yeesh, it’s not enough that we ask foreign companies to risk their capital in Canada, abide by myriad laws and regulations and pay taxes — now the NDP also wants to put them on trial.
Of course, the first thing the NDP would want to know is how much the CEO would get paid, which obviously would have nothing to do with the merger.
Oh, and how did you travel here? You didn’t ride a bike over from London? Shame on you.
Sure they bring untold billions of dollars to Canada and produce enormous wealth which is then redistributed, but the NDP won’t be happy until corporate executives beg forgiveness, renounce their worldly goods and run crying from the room.
In the depressing world of the NDP, if you’re a success in business it’s because you exploited the workers, the environment or that mythical figure, the little guy. They see the movie Wall Street as a documentary.
The government should approve this deal without delay, lest the horrid idea of public hearings gets traction and makes Canada an investment pariah.
Toronto Sun
BobBob
Senior Member
A valuable analysis by the Sun, if you're just looking for validation of pre-conceived notions and happen to fall within a certain IQ range, that is.
Coltaine79
Active Member
That was an absolutely horrible article and a complete waste of ink + paper. After reading it, I fear my IQ has lost a few points...
Anyways, the best article on this issue (IMO) is Olive's from thestar.
http://www.thestar.com/business/article/936667
Bogtrotter
Senior Member
Indeed the Australian's have the same concerns about the Sydney exchange, which is why they are now pushing for a full 50/50 arrangement with Singapore.
That brief Sun article is obviously rubbish. Here's a more considered article from a right leaning publication which at least has some semblance of analysis: http://www.financialpost.com/opinion/columnists/merger/4314020/story.html
That brief Sun article is obviously rubbish. Here's a more considered article from a right leaning publication which at least has some semblance of analysis: http://www.financialpost.com/opinion/columnists/merger/4314020/story.html
js97
Senior Member
The problem with that article is that it's no better than the far left groups that it's rediculing.
It's not a Black and White issue. There are opportunity costs , but also potential gains.
Yes, it's private investors that are at risk, but when the TMX became a public venture, to have access to new capital sources through a government (tax-dollar) regulated vehicle, then it does become a government/public interest.
Bogtrotter
Senior Member
Say no to merger- National Post
The proposed takeover of the TMX Group Inc. is unacceptable and would injure Canada's competitive advantages. The owner of the TSX is not just a public company with an equity and derivatives business that trades and raises capital for public companies. It is the linchpin to Canada's mining and energy industry and, therefore, to the country's future.
It's ironic that as politicians ponder this takeover by the London Stock Exchange, up to 30,000 people from dozens of nations will descend on Toronto from March 6 to 9 for the annual Prospectors and Developers Association of Canada confab, the world's biggest mining conference. They're coming because this is the world's mining mecca. They're not on their way to Sydney. Or London. Or Rio de Janeiro. Or New York. Or Hong Kong.
Canadians have built the world's smartest mining infrastructure, which consists of specialized brokers, underwriters, bankers, money managers, investors, accountants, lawyers, engineering firms, geophysical scientists, suppliers, mining contractors, junior companies, geologists, manufacturers and companies. Consider its stature:
- The TSX is the top exchange to invest in mining in Africa.
- The TSX is the top exchange to invest in Latin America.
- The TSX is the go-to exchange for mining companies internationally.
- The TSX consists primarily of Canada's powerful banks and resource companies and has become the sixth-largest exchange in the world by equity of all kinds raised.
- The TSX is the world's second-largest exchange in terms of issuers.
- The TSX lists 55% of the world's public mining companies.
- The TSX lists 35% of the world's public oil and gas companies.
- The TSX has captured on average 80% of the world's mining financings.
- The TSX has raised 36% of total equity globally.
Meanwhile, London is on the downstroke; dozens of companies delist most years. But mining listings pour into the TSX and derivatives are growing nicely.
The deal is also insulting. Ontario Finance Minister Dwight Duncan rightly called proponents "storytellers" this week. They call it a merger when it is not and London shareholders get 55% of the combined entity and board control. It should never have been negotiated because it contravenes a 10% ownership limit pledge made by the TSX in 2008 to the Ontario Securities Commission.
The 10% limit must never be waived because it represents a valuable, strategic advantage, which should remain inviolate for two reasons: to protect the equity and derivatives exchanges from outside marauders; and, more importantly, to help the TSX take over other exchanges for their listings or technology without fear of being taken over itself. In other words, in an eat-or-be-eaten world, the ownership limit allows the TSX to eat, not being eaten.
Also, if the 10% rule is waived for a London-TSX deal, the promises about joint head offices, board seats and Canadian oversight are worthless. These two will be immediately gobbled up by bigger fish and Canada's financial infrastructure will become the branch plant of the branch plant of the branch plant.
It's also important for politicians to realize the TSX is not an exchange. It's the epicentre of Canada's best opportunity going forward as the world's pre-eminent mining and energy exchange at the outset of an unprecedented commodity super-cycle. The TSX, with the right managers and strategy, is positioned to dwarf the London and most other exchanges in a handful of years.
Finally, the only beneficiaries of this deal are those who negotiated it. The consolidations sweeping exchanges are driven by a shrinking market due to poor management and lousy technology despite booming equity sales. These deals are underwriter driven, faddish and not rooted in meeting investor needs because investors can buy stocks anywhere in the world anytime they wish. They are also not rooted in meeting the needs of the listed companies on these exchanges.
"London listing fees are double if not triple Toronto's and rules will be more onerous and restrictive," commented one mining CEO. Another said: "Investors have no problem trading on the TSX or finding Canadian stocks and a listing in London would require more marketing costs, and more red tape, which are another burden to companies."
Canada's corporations, and mining companies from around the world listed on the TSX, will be poorly served with gigantism: Listings, red tape, another head office and duplicate regulatory procedures will add costs and guarantee that small startups now and in future headed for the TSX will fall through the cracks instead of being nurtured by Canada's world-class, specialized mining financial industry.
If the TSX avoids falling victim to the frenzied rush to consolidate exchanges, it will benefit from an eventual flight by listed companies to exchanges that are specialized, cheaper and unburdened by unneeded and multiple regulatory regimes.
Frankly, the whole proposal is insulting and foolish. If you don't think so, just ask the 30,000 mining experts and dealmakers who are headed to Toronto why they aren't on their way to do mining deals in London, Frankfort, Sydney, Rio or New York next weekend.
The proposed takeover of the TMX Group Inc. is unacceptable and would injure Canada's competitive advantages. The owner of the TSX is not just a public company with an equity and derivatives business that trades and raises capital for public companies. It is the linchpin to Canada's mining and energy industry and, therefore, to the country's future.
It's ironic that as politicians ponder this takeover by the London Stock Exchange, up to 30,000 people from dozens of nations will descend on Toronto from March 6 to 9 for the annual Prospectors and Developers Association of Canada confab, the world's biggest mining conference. They're coming because this is the world's mining mecca. They're not on their way to Sydney. Or London. Or Rio de Janeiro. Or New York. Or Hong Kong.
Canadians have built the world's smartest mining infrastructure, which consists of specialized brokers, underwriters, bankers, money managers, investors, accountants, lawyers, engineering firms, geophysical scientists, suppliers, mining contractors, junior companies, geologists, manufacturers and companies. Consider its stature:
- The TSX is the top exchange to invest in mining in Africa.
- The TSX is the top exchange to invest in Latin America.
- The TSX is the go-to exchange for mining companies internationally.
- The TSX consists primarily of Canada's powerful banks and resource companies and has become the sixth-largest exchange in the world by equity of all kinds raised.
- The TSX is the world's second-largest exchange in terms of issuers.
- The TSX lists 55% of the world's public mining companies.
- The TSX lists 35% of the world's public oil and gas companies.
- The TSX has captured on average 80% of the world's mining financings.
- The TSX has raised 36% of total equity globally.
Meanwhile, London is on the downstroke; dozens of companies delist most years. But mining listings pour into the TSX and derivatives are growing nicely.
The deal is also insulting. Ontario Finance Minister Dwight Duncan rightly called proponents "storytellers" this week. They call it a merger when it is not and London shareholders get 55% of the combined entity and board control. It should never have been negotiated because it contravenes a 10% ownership limit pledge made by the TSX in 2008 to the Ontario Securities Commission.
The 10% limit must never be waived because it represents a valuable, strategic advantage, which should remain inviolate for two reasons: to protect the equity and derivatives exchanges from outside marauders; and, more importantly, to help the TSX take over other exchanges for their listings or technology without fear of being taken over itself. In other words, in an eat-or-be-eaten world, the ownership limit allows the TSX to eat, not being eaten.
Also, if the 10% rule is waived for a London-TSX deal, the promises about joint head offices, board seats and Canadian oversight are worthless. These two will be immediately gobbled up by bigger fish and Canada's financial infrastructure will become the branch plant of the branch plant of the branch plant.
It's also important for politicians to realize the TSX is not an exchange. It's the epicentre of Canada's best opportunity going forward as the world's pre-eminent mining and energy exchange at the outset of an unprecedented commodity super-cycle. The TSX, with the right managers and strategy, is positioned to dwarf the London and most other exchanges in a handful of years.
Finally, the only beneficiaries of this deal are those who negotiated it. The consolidations sweeping exchanges are driven by a shrinking market due to poor management and lousy technology despite booming equity sales. These deals are underwriter driven, faddish and not rooted in meeting investor needs because investors can buy stocks anywhere in the world anytime they wish. They are also not rooted in meeting the needs of the listed companies on these exchanges.
"London listing fees are double if not triple Toronto's and rules will be more onerous and restrictive," commented one mining CEO. Another said: "Investors have no problem trading on the TSX or finding Canadian stocks and a listing in London would require more marketing costs, and more red tape, which are another burden to companies."
Canada's corporations, and mining companies from around the world listed on the TSX, will be poorly served with gigantism: Listings, red tape, another head office and duplicate regulatory procedures will add costs and guarantee that small startups now and in future headed for the TSX will fall through the cracks instead of being nurtured by Canada's world-class, specialized mining financial industry.
If the TSX avoids falling victim to the frenzied rush to consolidate exchanges, it will benefit from an eventual flight by listed companies to exchanges that are specialized, cheaper and unburdened by unneeded and multiple regulatory regimes.
Frankly, the whole proposal is insulting and foolish. If you don't think so, just ask the 30,000 mining experts and dealmakers who are headed to Toronto why they aren't on their way to do mining deals in London, Frankfort, Sydney, Rio or New York next weekend.
brockm
Active Member
There is absolutely nothing rational about your argument against this merger. Nothing. At. Al..
I've been watching all you centre-left, economic nationalists, pontificate about all the various "reasons" -- insofar as they can be called such -- for blocking this consolidation. None of them make any sense, and fail the most simple of reasoning tests.
The only real threat of loss to Canadians -- and it's a small one -- that the specific profits of the TMX Group itself, will find itself in the hands of international owners. But the TMX Group's profits are inconsequential to the overall economy.
The reason why Canada is at the centre of global resource investment is not because of the TSX. I hate to break this to you. It's because we're the world's richest country in natural resources. Even an outright sale of the TSX to foreign owners would not change this.
Are you people suggesting, that as a result of this sale, investment in Canada's resource sector will decline? If so, why? Do Canadians not invest in American stocks because those stocks aren't listed on the TSX? It seems to me this isn't the case, since almost half of the capital on the NYSE is foreign capital.
The TSX is merely a vehicle for creating a market between investors and businesses seeking capital. Considered in these terms, the downsides of the merger are nonexistent. Rather, Canadian companies will be able to more easily, with less red tape, access a much larger capital pool. More capital, means cheaper capital, which means it's easier for Canadian entrepreneurs to raise money to expand and create jobs.
None of you economic nationalists -- and that's what you are -- can step out of your emotional pontificating -- and that's all it is -- about the horror of foreign buyouts. It's almost like you're suggesting that by, the TMX Group being foreign owned, all our resource profits will go to said foreign ownership. Yet, the TMX Group doesn't collect resource profits. They facilitate a market for equities trading. How, exactly, does the ownership structure affect these capital flows? I'm having real trouble with that. Not a single, damned opponent of this has ever explained that to me.
Do you fools actually understand how much entrepreneurial activity that Canada misses out on, because Canadian upstarts move straight out of Canada and to the United States? Do you fools actually understand that a large reason for this is that investment capital is easier to come by in the United States?
You people talk of "competitive advantage", but you don't know the meaning of the bloody term. When it comes to access to capital, Canadian businesses are not at a competitive advantage. They're at a competitive disadvantage. And, just like all other economic nationalists before you, your obsession with emotional argumentation, over even a basic understanding of economic reality, stunts the potential growth of the Canadian economy. Statistics showing we're number one in mining stocks int he world are merely emotional arguments. Nothing more.
Canada has amongst the lowest productivity in the G8. Not the highest. That productivity measure is largely a result of low risk appetite for investment. This merger would increase the availability of such capital.
Yet, you fools (and I mean Canadians in general), will go on waving your Canadian flags yelling "it must be Canadian owned," "Canada is being sold out!", "we'll all be the cheap whores of Fleet Street!"
What you really should be yelling, because it's what you're advocating for is: "I love mediocrity!", "I don't understand anything about business and economics!", "I'm a two-bit economic nationalist, once removed from the economic logic of Hugo Chavez!"
I've been watching all you centre-left, economic nationalists, pontificate about all the various "reasons" -- insofar as they can be called such -- for blocking this consolidation. None of them make any sense, and fail the most simple of reasoning tests.
The only real threat of loss to Canadians -- and it's a small one -- that the specific profits of the TMX Group itself, will find itself in the hands of international owners. But the TMX Group's profits are inconsequential to the overall economy.
The reason why Canada is at the centre of global resource investment is not because of the TSX. I hate to break this to you. It's because we're the world's richest country in natural resources. Even an outright sale of the TSX to foreign owners would not change this.
Are you people suggesting, that as a result of this sale, investment in Canada's resource sector will decline? If so, why? Do Canadians not invest in American stocks because those stocks aren't listed on the TSX? It seems to me this isn't the case, since almost half of the capital on the NYSE is foreign capital.
The TSX is merely a vehicle for creating a market between investors and businesses seeking capital. Considered in these terms, the downsides of the merger are nonexistent. Rather, Canadian companies will be able to more easily, with less red tape, access a much larger capital pool. More capital, means cheaper capital, which means it's easier for Canadian entrepreneurs to raise money to expand and create jobs.
None of you economic nationalists -- and that's what you are -- can step out of your emotional pontificating -- and that's all it is -- about the horror of foreign buyouts. It's almost like you're suggesting that by, the TMX Group being foreign owned, all our resource profits will go to said foreign ownership. Yet, the TMX Group doesn't collect resource profits. They facilitate a market for equities trading. How, exactly, does the ownership structure affect these capital flows? I'm having real trouble with that. Not a single, damned opponent of this has ever explained that to me.
Do you fools actually understand how much entrepreneurial activity that Canada misses out on, because Canadian upstarts move straight out of Canada and to the United States? Do you fools actually understand that a large reason for this is that investment capital is easier to come by in the United States?
You people talk of "competitive advantage", but you don't know the meaning of the bloody term. When it comes to access to capital, Canadian businesses are not at a competitive advantage. They're at a competitive disadvantage. And, just like all other economic nationalists before you, your obsession with emotional argumentation, over even a basic understanding of economic reality, stunts the potential growth of the Canadian economy. Statistics showing we're number one in mining stocks int he world are merely emotional arguments. Nothing more.
Canada has amongst the lowest productivity in the G8. Not the highest. That productivity measure is largely a result of low risk appetite for investment. This merger would increase the availability of such capital.
Yet, you fools (and I mean Canadians in general), will go on waving your Canadian flags yelling "it must be Canadian owned," "Canada is being sold out!", "we'll all be the cheap whores of Fleet Street!"
What you really should be yelling, because it's what you're advocating for is: "I love mediocrity!", "I don't understand anything about business and economics!", "I'm a two-bit economic nationalist, once removed from the economic logic of Hugo Chavez!"
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AlvinofDiaspar
Moderator
I think we can skip calling anyone "fools" and let your arguments stand on it's own - they're fine as they are.
AoD
AoD
brockm
Active Member
I'm sorry. You're right. But the emotional nature of the arguments, is causing me to become frustrated and angry. I've had this argument three times a day for over a week now.
brockm
Active Member
Here is my response, in article form, at The Volunteer: http://www.thevolunteer.ca/2011/02/we-dont-want-your-investment/
SimonP
Active Member
You state that the TSX lead in mining is "because we're the world's richest country in natural resources." That explains the origins of the specialization, but it doesn't explain why Toronto is the go to exchange for resource firms from around the world. We have that position because our large local holdings have created a great deal of expertise in this area. It is not the geographic advantage, but the expertise that today gives the TSX its edge.
This expertise is exactly what the LSE is after, and it is very transportable. It is not just possible but probable that ten years after this deal, most of this expertise will have been transferred to the London offices. With it will go a lot of good paying jobs, and much of our competitive edge in the mining industry. The edge that has helped make so many Canadian mining companies global players.
This expertise is exactly what the LSE is after, and it is very transportable. It is not just possible but probable that ten years after this deal, most of this expertise will have been transferred to the London offices. With it will go a lot of good paying jobs, and much of our competitive edge in the mining industry. The edge that has helped make so many Canadian mining companies global players.